IT Spending To See Modest Growth In 2013

Outlays on personal devices and enterprise software expected to lead global recovery in IT market, according to forecasts from Gartner and Forrester.

Global spending on IT products and services should grow in the low- to mid-single digits over the next 12 months, according to forecasts published Thursday.

Gartner predicts spending to increase 4.2% compared to 2012, to $3.7 trillion, or 3.9% when the effects of changes in exchange rates are excluded. Forrester is calling for a 5.4% uptick in worldwide IT spending in 2013, to $1.8 trillion, or a 3.3% gain excluding exchange rate shifts. Unlike Gartner, Forrester does not include spending on telecom products and services in its forecasts.

Analysts at both firms said the end of uncertainty related to the so-called fiscal cliff helped ensure at least modest growth for the IT industry this year.

The product category poised for the most growth, according to Gartner, is devices, which includes PCs, tablets and smartphones. Worldwide spending on such products will increase 6.6%, to $666 billion, the firm predicts. Gartner previously predicted that the category would grow 7.9% this year, but the increasing popularity of low-cost tablets -- at the expense of pricier PCs -- led it to lower its forecast.

"The tablet market has seen greater price competition from Android devices as well as smaller, low-priced devices in emerging markets," said Gartner managing VP Richard Gordon. "It is ultimately this shift to relatively lower-priced tablets that lowers our average selling prices forecast."

Forrester predicted that Apple will outpace other device makers, estimating that the company's enterprise Mac sales will total $7 billion this year while enterprise iPad sales will hit $11 billion.

Regionally, Europe, Middle East and Africa (EMEA) will lead, as tech spending in Eastern Europe, the Middle East and Asia is expected to increase 8.9% year over year in 2013. Growth in the U.S. is expected to come in at a solid 7.5%, according to Forrester. Growth in Latin America is seen at 6.4%, Asia Pacific at 4% and just 0.8% for Western and Central Europe, as debt-laden countries such as Greece and Spain drag down the region.

Forrester principal analyst Andrew Bartels said the Congressional deal that extended the Bush tax cuts for those making less than $450,000 a year helped the U.S. numbers. "Two-thirds of the risk of a recession has been removed," said Bartels. "We still have concerns about spending cuts and the debt ceiling, but we've gotten past the biggest concern."

Within the U.S. market, Bartels expects to see a strong increase in spending on IT services, and on software related to mobility, analytics and collaboration. More-traditional enterprise software, such as ERP, CRM and database products, will see "more mundane growth rates" in the mid-single digits, said Bartels.

The weakest category, telecom services, is expected to grow just 2.4% in 2013, according to Gartner.

Tech spending is looking up, but IT must focus more on customers and less on internal systems. Also in the new, all-digital Outlook 2013 issue of InformationWeek: Five painless rules for encryption. (Free registration required.)

Companies need to be setting a healthy chunk of change for their companies IT budget.No surprise the areas of tablets, laptops, and mobile devices seems to have the largest growth in funds. Apple sales are going to be the highest, that's in revenue, not devices, right? Apple products cost more and have to do half the sales to make the same profit as competitors.

Just because the server market's in the doldrums doesn't mean innovation has ceased. Far from it -- server technology is enjoying the biggest renaissance since the dawn of x86 systems. But the primary driver is now service providers, not enterprises.